Let’s Abolish Capitalism!
Because high infant mortality, massively reduced life expectancy, incurable diseases, and abject global poverty are all preferable to what we have today
As I was walking up to the gym in Lausanne today I passed another demonstration in the town square. Children of all ages, ranging from late teens to late sixties, were out in force waving placards and chanting slogans, all merrily virtue-signaling to each other how Politically Correct they were.
Feminism is anti-capitalism!
Anti-racism is anti-capitalism!
Justice for all is anti-capitalism!
Pretty much every slogan, which was inevitably greeted with enthusiastic cheers by the crowd, invoked anti-capitalism. Perhaps Thomas Piketty was the sponsor of this particular demonstration and was selling his books (at a suitable discount, one must assume…) somewhere off in the distance.
No one in the crowd of happy virtue-signalers seemed in the slightest bit conscious of the fact that all their clothes and shoes were entirely the product of capitalism. They seemed unaware of the fact that without capitalism they wouldn’t be able to take pictures of themselves gleefully denouncing the system that made all their phones and created all the social media apps to which they were uploading their Politically Correct pictures. They seemed oblivious of the fact that all the trains and all the busses and all the automobiles that transported them to Lausanne are the products of capitalism.
In short, these self-satisfied children of all ages were basically akin to fish protesting loudly about the iniquity of water.
As anti-capitalism is an easy slogan to chant despite its total incoherence, it’s worth reminding ourselves what capitalism really is, and what it’s not.
Capitalism is not 1% owning 47% of the world’s wealth. Capitalism is not investment bankers walking off with multi-million dollar bonuses after wrecking the world economy. That’s called corruption. These things happen because the politicians we elect are eager to sell themselves to the highest bidders and then write laws that permit grotesque distortions of the economic system.
But guess what?
These kinds of things were happening long before capitalism existed. The Craft Guilds of the middle ages got to screw ordinary people for centuries because they were careful to pay off the barons and kings in return for their juicy monopolies.
So what is capitalism, if it’s not grotesque accumulations of wealth by the relatively undeserving?
Capitalism is the application of capital in order to increase total factor productivity.
In other words, if you have (or can borrow) some spare cash and you invest it in a machine that can produce more than you could produce by hand, you’ve reduced the cost of whatever it was you’re making and you’re able to make a little more profit by selling more at a lower price. That’s capitalism.
A concrete example may help. Let’s say we have Mary, who’s a skilled weaver on a hand-loom. Mary can create enough fabric for one shirt each day, which she sells for $60 in order to earn enough to pay her rent and buy food for her children. Now Mary borrows enough to buy a water-powered loom and she’s able to make enough fabric for four shirts each day. Now she can sell those four shirts for $22 each.
Mary now earns more money per day (even allowing for her increased cost of raw material as she’s consuming more wool each day now) so she’s better off. The people buying her shirts are also better off because now they can buy a shirt of $22 instead of for $60 so they can either buy more shirts or spend the leftover $38 on some other items instead. Like food.
Now scale up this example. Remember when automobiles were hand-made? Each one cost the equivalent in today’s money of more than $1 million. So only the very rich could afford automobiles. Then along came Henry Ford to exploit the capitalist system and suddenly even blue-collar families could afford an automobile. Just like today.
This example can be applied to absolutely everything we own and everything we eat and everything we watch or read or listen to for entertainment. Capitalism has reduced the cost of everything by several orders of magnitude while simultaneously improving quality continuously over time. That early million-dollar Rolls-Royce didn’t have air conditioning, airbags, anti-lock brakes, stability control, navigation system, digital radio, crumple zones, or electric seats and windows. But your typical mid-range family car these days has all those things and much more.
Because of capitalism.
Now let’s look at death and disease.
Without capitalism, there’s no incentive to produce medicines. So back comes measles, tuberculosis, typhoid, cholera, polio, and all manner of pleasant ways to become crippled or dead.
Without capitalism, infant mortality returns to where it was four hundred years ago: one in ten (today’s infant mortality rate, by comparison, is about four per thousand). Without capitalism, life expectancy would drop back to around 35, as opposed to around 76 today.
Without capitalism, each of us would be able to afford approximately five pairs of shoes in our entire lifetime, and there wouldn’t be much in the way of choice regarding fashion.
Without capitalism, none of us would be able to afford timepieces.
Without capitalism, most of us would live and die within eight kilometers (five miles) of our place of birth.
Without capitalism, most of us would have exceedingly limited career options: ploughing fields with implements pulled by oxen, weaving or pottery-making, thatching or mud-brick making, or perhaps if we were super lucky we might learn to read and become a scribe for someone wealthy.
Assuming we lived past childhood, that is…
Some countries have tried other systems aside from feudal-style economies. The USSR famously attempted to do away with capitalism in favor of the command economy. How did that work out for them?
I visited Russia and Ukraine extensively some years after the collapse of the USSR and I heard countless stories of deprivation during the Soviet years. The mother who had to share the family’s one pair of shoes with her two daughters. The family that lived on nothing but potatoes for over a year and lost many teeth to scurvy. The parents who lost their son because when his wound became infected the only antibiotics available were the wrong kind.
Maybe the USSR was a fluke. So let’s see how Venezuela is doing. Ooops…. OK, how about North Korea?
Seems like capitalism is really terrible except when you try to do without it. Then you discover that the alternatives are much, much worse. That’s why North Koreans reliably find themselves eating grass mixed with mud every few years. If you think a diet of grass and mud is a price worth paying to get rid of evil capitalism, please be my guest.
Only, do try it out for a few weeks first rather than just waving placards and chanting slogans. You may be surprised how limited the appeal of anti-capitalism really is.
It’s true, however, that in far too many Western nations endemic corruption has led to a total perversion of capitalism in many sectors of the economy. But, as noted before, that’s the fault of corruption and not the fault of capitalism per se. It’s the fault of voters who are too ignorant and too complacent to take the trouble to educate themselves on the reality of the nation in which they live. It’s the fault of all of us who prefer facile sound-bites to expending real intellectual effort.
Europe has shown that societies don’t have to be winner-takes-all. Soulless empty cultures like the USA are in fact a function not of capitalism but of a bizarre combination of chance historical circumstances. In northern Europe, different factors were at work and so the outcomes have been different.
Northern Europe is far more socialist than places like the USA and the UK (the latter being a gloomy backward-looking place where people seem to idolize their image of the USA without understanding anything of the reality). Socialism is a coherent approach to ensuring that the benefits of capitalism are spread widely.
Socialism, obviously, relies on capitalism in order to generate the wealth that socialism needs. Many socialists (for example, in France) fail to understand this, but that doesn’t make it any less true. Countries that do understand the inter-dependency function extremely well. The Scandinavian nations reliably score at the top of all quality of life indexes, whereas the USA reliably scores just above benighted nations in Africa, South America, and South-East Asia.
I’m all in favor of socialism.
Which is why I’m also all in favor of capitalism.
If you can’t understand why those two positions are mutually supporting, I suggest you take the time to educate yourself in basic economic principles. You may be surprised at what you discover.
Or, you could join the merry children next weekend in Lausanne and wave a placard around while chanting a mindless slogan.
Much easier to do, but totally worthless.